Pizza Hut India operator misses Q1 profit estimates on weak demand, surging costs (updated)

Sapphire Foods India

30/07/2024 09:04

(Adds details throughout)
       BENGALURU, July 30(Reuters) - Sapphire Foods India
 SAPI.NS , which operates the Pizza Hut  and KFC chains of
restaurants, reported a larger-than-expected decline in its
first-quarter profit on Tuesday, as costs rose while it
struggled to entice budget-conscious customers.
    The Yum Brands  YUM.N  franchisee's consolidated net profit
fell 68% to 85.2 million rupees ($1.02 million) for the quarter
ended June 30. Analysts, on average, had expected a profit of
173.9 million rupees, according to LSEG data.
    India's quick-service chains have been facing difficulties
in attracting customers amid persistent inflation, which
remained around 5% during the quarter.
    Fast-food franchises are experiencing low demand as
financially-strained consumers have cut back on dining out and
ordering in.
    Prices of key raw materials including cheese, chicken and
tomato have also been rising.
    Sapphire Foods' revenue from operations rose 10% to 7.18
billion rupees in the June quarter, missing analysts' estimate
of 7.23 billion rupees. 
    The company said prices of ingredients rose nearly 10%,
expanding its total expenses by 13% to 7.12 billion rupees.
    McDonald's  MCD.N  India operator Westlife Foodworld
 WEST.NS  reported a plunge in first-quarter profit amid frail
demand, while Burger King's India operator Restaurant Brands
Asia  RESR.NS  reported a narrower first-quarter loss as offers
and discounts swayed customers.
    Rivals Devyani International  DEVY.NS , which also operates
KFC outlets in the country, and Domino's India-franchisee
Jubilant FoodWorks  JUBI.NS  have yet to report results.

($1 = 83.7350 Indian rupees)

 (Reporting by Ashna Teresa Britto; Editing by Mrigank
Dhaniwala)
 ((AshnaTeresa.Britto@thomsonreuters.com;))